Saratoga Springs Child Custody and Tax Implications
If you have children and are considering divorce in the state of New York, it is crucial to understand the laws surrounding Saratoga Springs child custody and its tax implications. Child custody laws and how they relate to taxes can be difficult to understand. While personal research can provide a foundation, you should find a trustworthy child custody attorney to guide you through the process.
A lawyer could help you with the taxes associated with paying child support and dependency exemptions. Determining child custody is a significant event and is not a topic that should be handled alone.
Tax Implications for Child Custody and Support
However it is awarded, it is essential to understand Saratoga Springs child custody and its tax implications. Generally, there will be a settlement agreement, which will state which parent is entitled to claim each of the children. This agreement only shows how the spouses have decided who is entitled to the exemption. The Internal Revenue Code section 152(e) provides that the tax exemption belongs to the custodial parent unless they execute a release.
Child support is a payment for the child’s needs by the non-custodial parent to the custodial parent. State law governs child support obligations. For tax purposes, child support payments are non-deductible by the person paying them out and are not included as income by the payee.
Unless the right is waived, the custodial parent is able to claim the dependency exemption for the child or children. The custodial parent’s right to claim the exemption may be waived by submitting IRS Form 8332, which must be attached to the non-custodial parent’s tax return. If the parents fail to provide for the allocation of the dependency exemption in an agreement, the exemption is automatically given to the custodial parent.
Taxes in 50/50 Custody Arrangements
Generally, if parents have joint custody of the child or children, the parent who has the child for the greater part of the year may claim the child as a dependent on their taxes. However, a true 50/50 split on child custody could have different tax implications in Saratoga Springs. The IRS will take into account several other factors, including whether one or both spouses are biological parents, and which of the parents has a higher income.
Using an IRS Form 8332, parents can alternate the years that each of them claims a child as a dependent. This allows them to share the tax benefits. This form is also used to enable a non-custodial parent to claim a child on individual filed taxes. One circumstance that may justify the use of this form is if the parent who is eligible to claim the dependent chooses not to and wants to allow the other parent to claim the child for tax purposes.
The IRS allows a person to amend a tax return that they have filed within the last three years, or, if they accidentally claimed a dependent, within the last two years. The IRS may waive the penalty fee if one can prove that the mistake was accidental.
Discuss Child Custody and Tax Implications in Saratoga Springs with an Attorney
The goal of New York child custody laws is to protect the child’s best interests. While it is sometimes said that there are few guidelines for awarding child custody, this is not accurate. The standard may be broad but case law has defined “best interests” extensively.
Saratoga Springs child custody and tax implications can be complicated, so it would be wise to have a legal professional guide you through the proceedings. Do not hesitate to contact the office right away.